Undercover Analysis: Episode 7; Second Cup CEO Stacey Mowbray

Undercover Analysis is a 10-part part series offering insight on the strengths, weaknesses and opportunities of Canada’s Undercover Bosses. Tune in to the W Network each Thursday at 9 p.m ET to catch Canada’s CEOs as they go incognito within their own organizations to discover the truth from the bottom-up.

The Synopsis

Under CEO Stacey Mowbray’s direction, Second Cup is gunning to reverse the losses of the last decade and take on the intense coffee chain competition as Canadians’ cup of choice. The challenge is steering a new course in the franchise system where change can’t be mandated, but rather inspired. With bod competition and an evolving brand, Second Cup needs to make its mark as company that care ans provides the best cafe experience. Stacey gets brewing with her frontline employees — her most valuable asset — and shows them what this really means.

Marty ParkerStacey Mowbray is a smart, determined and driven executive. But on last night’s Undercover Boss, she showed she has another attribute that is invaluable to all leaders today: the ability to look for unique and differentiating opportunities in the business to improve sales, operations and customer service. A barista she is not, but Mowbray sees the good and the bad in Second Cup’s stores and roasting facility, and she proves that as CEO she is not afraid to make tough decisions.Posing as Anne Harrison, an eager new employee looking to learn the ropes of brewing coffee on the front lines, Mowbray immediately understands that working in the quick-service restaurant (QSR) business requires one to be speedy without compromising exceptional service. This she learns from frontline employees Simone, Kyle and Lina, who clearly understand personalized service in record time. Mowbray, like other executives on previous episodes of the show, inevitably cracks under the strain of trying to move quickly while accurately producing customized cups of coffee. What’s impressive is that, despite the challenging work, she simultaneously uses the opportunity to think about how to make the experience more uniform, as well as better and easier for the customer and her franchisee’s employees.

Mowbray understands that in the customized foodservice business, there is a large margin for error, and when she returns to head office, she is not afraid to point out to her operations leader that more training and work needs to be done to improve in this key area.

Mall store manager Lina sets the standard of excellence for store leadership and Mowbray uncovers this immediately. The best franchisors understand that the quality of their franchises is directly correlated to the quality of the in-store management, and Mowbray sees this in Lina. Lina picks up her employees in the van provided by head office, and runs a busy mall store with grace and professionalism. Mowbray also witnesses the catering program that the franchise runs and smartly decides with her management team to roll out a catering program across all the network’s stores. In high office density urban markets, this has a solid likelihood of success. I even plan to give this a shot in my Toronto office as a tribute to her initiative. Well done.

Mowbray should consider Lina the model for hiring exceptional store management. She should think about trying to convince her franchisee that the store be used as a corporate training centre for new franchisees and employees.

Mowbray understands something more and more chief executives are realizing these days — that corporate social responsibility isn’t just good business, it’s the right thing to do. We see this when she recognizes store manager Simone’s personal initiative to deliver unpurchased, leftover food to local food banks. Customers, employees (current and future) and suppliers should be made aware of this. I would encourage Mowbray to put her marketing hat back on (she is the company’s former VP of marketing) and advertise this in the stores.

Finally, Mowbray does what all good chief executives do — she makes a tough decision to close the corporate store on Queen St. West in Toronto, as it needs equipment upgrades, possible new management and is quite simply in the wrong location. It’s not an easy decision, but Mowbray does the right thing for the right reasons. Far too often, franchisors will attempt to sell these stores to franchisees, believing that an owner/operator can make them work better than the corporation. As true as this may be for most Second Cup stores, Mowbray knows the difference between a good location and a bad one. Again, well done.

Second Cup, as Mowbray knows all too well, has a tough challenge ahead. I would encourage her and her team to think about making their stores as uniquely Canadian as possible in the upscale coffee house market. Second Cup is familiar, it is warm and friendly, and it is uniquely Canadian. With some tweaks and hard work (and under Mowbray’s determined and capable leadership), the chain could not only survive in the face today’s fiercely competitive market, but thrive.

Kendra ReddyOne of CEO Stacey Mowbray’s best leadership qualities is her passion. She truly lives and breathes the Second Cup brand promise of “the coffee company that cares” and her commitment to gaining marketshare through fantastic customer service and experience is admirable. It’s also obvious — in that Mowbray is able to stay focused on the business and avoid playing the blame game.When working with Simone, the weekend supervisor, Mowbray noticed that she wasn’t making the drinks to corporate standard. Instead of questioning what was wrong with Simone, her first question was “how can head office provide better training and awareness across the board?” While working with store manager, Lynne, she sees first hand that the store is functioning with broken equipment and sheer force of will.

While it’s ironic that the only corporately owned location is also the one with the most issues, Mowbray again stays away from finger pointing about who should have been doing what while she was busy in the boardroom. At the same time, Lynne also steers clear of the blame game, even though it could have been easy for her to shake her finger at corporate head quarters for not responding to the list of problems she submitted and didn’t get a response to. Also avoiding the tempting blame game was barista Kyle, who easily could have blamed any number of issues (low sales for the day, customer complaints about flavoured coffee, etc.) on Mowbray’s alter ego Ann.

When organizations, leaders, and individuals focus on finding the source of the problem, rather than the solution to the problem it can quickly turn into a giant, multiplayer game of hand slapping. The impact to groups and organizations is a serious disadvantage when it comes to creativity, learning, innovation, and productive risk-taking.

Second Cup appears to have knit together a group ofpeople who understand the ritualistic significance of the morning caffeine fix, and know that by creating a pleasurable experience built on satisfying that craving, they shape someone’s day. Store Manager, Lina seems to have mastered this especially well, cultivating a group of regulars who won’t even order from new girl “Ann” and only need to make eye contact with their regular barista to have their order filled. At the end of her week undercover, it was refreshing to hear Mowbray say that although she was tired, she was also energized and excited about getting back to the boardroom to start making changes and taking action on some of the feedback she had heard.

There is a great opportunity to create consistency and share knowledge across the existing stores as well as position the 130 new stores for success by leveraging already engaged and compassionate employees. I encourage Mowbray to find ways to stay abreast of frontline employees’ suggestions and franchisee-created policies such as donating leftover food to local shelters and creating a coffee house feel by letting gifted employees showcase their talents on music night. These are the kinds of small but important differences that demonstrate Second Cup really is the coffee company that cares.